Metrics to Measure the Success of a PMO
There is a lot of time and effort expended to monitor the performance of projects. In fact it is very common for a project management office (PMO) to be formed in order to provide an independent view on project performance. This is very good for measuring the success of projects. However, it is also important for a PMO to have a process to measure their own success.
The reason it is important is that at some point someone will question the value provided by the PMO (especially when there is a downturn in business). Therefore, a smart PMO will implement processes to track and communicate success meaning they are ready to demonstrate value.
As many of the metrics to demonstrate progress will need to be built up over time, the sooner the PMO starts to collect the data, the better chance to be in a position to articulate the value added using facts.
There are many metrics that can be used, some will be unique to each organization. Below is some ideas of more generic metrics that are very powerful to show success.
Time to Mobilise
A common reason for project failure is slow mobilization. Measuring the time from project kick-off to mobilization complete, will demonstrate that the PMO has improved the time to market for projects. This can be achieved by measuring the time between a project being formerly started to sign-off of the business case (the usual gate into project execution).
% of Projects Delivered
This metric will measure how many projects launched each year (or appropriate time frame) actually are delivered and achieve the benefits in the business case. In order to track this you will need to be able to build a view of the performance of previous years so as to demonstrate how this has improved.
Variation of this metric is % of projects stopped and % of projects that fail to deliver benefits.
With the exception of regulatory or mandatory upgrades, most projects are started in order to achieve some form of benefit for an organization. Tracking the realization of benefits against business case will provide focus to ensure that the benefits are achieved. Again the % realized should be measured against previous years.
Return on Investment
Tracking the overall project costs and benefits will allow the calculation of return on investment (ROI) for the portfolio of projects. This is a good metric for senior management as it will provide them with insight on the return from investing in change.
A smart PMO will ensure that they have processes in place to track key metrics in order to demonstrate the value that is being added by the PMO through the improvement of project delivery. Over time the metrics will help identify problem areas i.e. slow mobilisation due to time to gain approval from management. This in turn will allow the issues to be addressed.
As a final word, don’t wait to be asked to demonstrate value. Be pro-active and provide senior management with a regular update, then they will not even stop to think if the PMO adds value.
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